T-Mobile CEO John Legere touting its Jump plan. AT&T Next was announced Tuesday in response.
Sarah Tew/CNET

The claws are out now.

T-Mobile CEO John Legere fired back at AT&T's new early upgrade plan, calling it "smoke and mirrors" and a "poor copycat," and warned that customers pay more and end up getting less than what T-Mobile's Jump plan has to offer.

"Their offer is terrible for consumers," Legere told CNET in an email on Tuesday.

Earlier Tuesday, AT&T introduced its AT&T Next plan, which lets people pay for their mobile devices in 20 monthly installments and allows them to upgrade each year. But the new plan doesn't include a key component -- a lower-cost service plan -- which T-Mobile said is its crucial standout feature in Jump, its early upgrade plan. As a result, T-Mobile claims AT&T Next is actually more expensive than ever.

"They're charging you twice on the same phone and calling that a good deal," T-Mobile executive Andrew Sherrard told CNET in an interview earlier today.

In addition to paying the full price of the phone over the monthly installments, AT&T Next customers also pay the same service plan rate they had been paying -- a rate that was designed to work with subsidized phones. When T-Mobile introduced its no-contract monthly installment plan, it cut the rate of its plan to reflect the lack of a subsidy.

"Why they think anyone would go for this plan is baffling to us," Legere said.

An AT&T representative told CNET that Next represents a new offer and different choice for customers.

"We're not taking away anything," he said. "We're just giving people choice by removing the up-front cost and allowing them to upgrade their phone."

AT&T wouldn't discuss the direct comparisons between Next and Jump, but noted that it offers a larger 4G LTE network.

"As people dig into this, they'll find it's a much better deal to go with Jump," T-Mobile's Sherrard said. He added that Jump includes insurance, which AT&T Next does not.

Verizon Wireless is expected to introduce a similar plan to that of AT&T, and Sherrard said he felt equally good about how Jump stacks up against the reported Verizon Edge plan.

Sherrard said he was happy that the industry was reacting to T-Mobile's moves. He called the competitors' moves "a response, not a strategy."

Sherrard said that as the challenger in the industry with the lowest market share among the big four U.S. carriers, T-Mobile can afford to be more aggressive to pursue growth. The big two companies can't follow because they have higher profit margins to protect.

"We're glad to change the game a little bit," he said.

Updated at 11:44 a.m. and 1:47 p.m. PT: to include a comment from AT&T and from the T-Mobile CEO.

About the author

Roger Cheng is the executive editor in charge of breaking news for CNET News. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade. He's a devoted Trojan alum and Los Angeles Lakers fan.
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